Mexico

Capital: Mexico City, Federal District (DF)

Local time:
It is %T:%M %A in Mexico City
It is %T:%M %A in Culiacán
It is %T:%M %A in Tijuana

GDP growth rate: 3.7% in 2013

FDI stock: 327 249 million USD in 2010

Economic trends

Mexico is the 14th largest economy in the world and second largest economy in Latin America. Although its GDP fell sharply in 2009 (-6.5%), economic growth rebounded in 2010 (5.5%), and continued in 2011. Vulnerable to external shocks, including the state of the U.S. economy, Mexican growth should slow down in 2012, to around 3.3%.

The outlook for the Mexican economy remains favorable. The banking system is sound, and through a policy of budgetary and fiscal restraint, public debt has been contained at about 32% of GDP and economic stability has been maintained. The discovery of gas fields in the country opens up and makes possible the withdrawal from nuclear energy, as announced by the Minister of Energy. But the country is heavily dependent on oil revenues and remittances from migrants living in the United States. Lack of education and violence are also hampering its development.

Less than 5% unemployment is foreseen for 2012, but the informal sector is very large. Inequalities have increased, in terms of income but also in terms of exposure to natural disasters. 46.2% of residents are poor. Insecurity related to crimes committed by drug cartels is a major problem.

Main branches of industry

Agriculture accounts for approximately 4% of the GDP and employs 13.5% of the active population, however, the scarcity of credit continues to penalize this sector. Mexico ranks amongst the world's largest producers of coffee, sugar, corn, oranges, avocadoes and limes. Mexico is the world's 5th biggest producer of beer and its number two exporter. It is amongst the world's leading producers of many minerals, including silver, fluorite, zinc and mercury, and its oil and gas reserves are one of its most precious possessions: Mexico is the world’s fifth largest producer of oil. The oil company PEMEX is the second most powerful company in Latin America, according to the industry journal América Economía. Cattle farming and fishing are also important economic activities.

The aerospace sector has grown sharply in the last five years, due to the presences of almost 190 companies, such as Bombardier, Goodrich, the Safran group and Honeywell, which together employ 30 000 people. Mexico is also one of the 10th major car producers. The hi-tech, information and software development sectors are also experiencing a real momentum, driven by the quality of the workforce, clusters and low operating costs, which allow for the establishment of call centers.

The tertiary sector contributes to around 60% of the GDP and the construction sector is coming up again due to real estate investments.

International trade

Mexico is one of the countries that most depends on foreign trade.  Foreign trade represents around 60% of its GDP.  Mexico has 11 free-trade agreements with 43 countries of the world. It is a member of NAFTA - the free-trade agreement that unifies the United States, Mexico and Canada, since 1994. The country signed a free trade agreement with the European Union in 2000 and a commercial agreement with Japan came into force in April 2005.

The United States buys 80% of Mexico's exports. Its main export partners are the NAFTA and the European Union. The main export goods are electrical and electronic equipment, vehicles, mineral fuels, oil and machinery.  Its three main import partners are the NAFTA, China and Japan.  It mainly imports electrical and electronics equipment, machinery, vehicles and plastic products.

In 2011, Mexico reduced its trade deficit (1,166 milion USD compared to 3,009 milion USD in 2010). Exports rose by 17.2% and imports by 16.4%.